promoting regional electricity trade in central asia bank_1.pdf · 2018-02-21 · electricity...
TRANSCRIPT
PROMOTING REGIONAL ELECTRICITY
TRADE IN CENTRAL ASIA
Paul Vallely
Program Leader
Central Asia Regional Office
6 September 2017
Organization of Presentation
A. Regional Power Trade
Section 1 – Benefits of Central Asia Regional Electricity Market
Section 2 – Regional Electricity Market Design and Best Practices
Section 3 – Regional Electricity Market Constraints
Section 4 – Suggested Next Steps for Central Asia
B. Central and South Asia Electricity and Trade Project (CASA 1000)
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� Landlocked hydrographic system
� High Water Dependency, exacerbated by infrastructure interdependence
� Multiple and competing uses (winter hydropower upstream; summer irrigation downstream)
The Current Situation
� 2 million households face winter shortages of heat and light
� USD1 billion lost annually due to reduced energy trade
� USD188 m/yr additional fiscal burden from unexploited 10 % increase in irrigation efficiency
� >USD200 million forgone in agriculture-compatible hydropower generation per year.
The Challenges
Towards Energy and Water Security
3
Regional Power Trade
Section 1: Benefits of Central Asia
Regional Electricity Market
Regional Trade Leads to a More Productive Use of Each Country’s Resources
• Utilize complementary resources within the day and across
the year
• Balance demand within the day and across the year when
load profiles differ between countries
• Improve integration of renewables
• Pool reserve capacity and other ancillary services, thereby
reducing costs of keeping power stations in reserve
• Reduce investment needs when planning carried out on
regional, rather than individual country, basis
5
Study Results under Three Main Scenarios
6
Conclusions of the CA REM Study
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• Effective regional energy trade in Central Asia can
provide significant regional benefits, both monetary
and in terms of reductions in energy not supplied
• All Central Asian countries benefit
• Results robust under broad range of scenarios
Regional Power Trade
Section 2: Regional Electricity Market
Design and Best Practices
Global REM Experience
9
• A staged approach is necessary for development of regional
electricity markets
• One size does not fit all
• There are various levels of regional power integration
• There are efficiencies to be gained under any integration scheme
• There is a need to establish regional institutions
• Technical and regulatory harmonization should be addressed as
soon as possible
• There should be a flexible approach to power sector reform
Prerequisites for Functional REM
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• Reciprocity, fair and non-discriminatory – in terms of
access to the grid and pricing
• Harmonized regional technical standards with
minimum requirements specified in regional grid code
• Regional governance structure including institutions,
market rules and dispute resolution process
Section 3: Regional Electricity Market
(REM) Constraints
Regional Power Trade
Takes Many Years to Put Effective Regional Energy Market in Place
� Before a competitive REM can be established, there are
numerous constraints to eliminate and a common regulatory
framework to implement
� A staged approach is necessary. For example, the EU reform
process has been ongoing for the past 20 years:
� First liberalization initiatives adopted in 1996
� Second liberalization initiatives adopted in 2003
� Third liberalization initiative adopted in 2009
� Reform continues to this day as the EU adopts additional resolutions to
improve the workings of the Internal Electricity Market
� Central Asia can benefit from the many lessons learned
elsewhere
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Common Barriers to Regional Trade
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• Common barriers to regional trade based onInternational experience include:
� Lack of trade pricing mechanisms and transparency
� Absence of harmonized regulatory and technicalframeworks governing trade
� Institutional weaknesses:
• Ineffective regional governance institutions and mandates; i.e.,absence of regional Transmission System Operator andRegulator with authority over regional market
• Few entities with the authority, expertise, incentive and financialresources to undertake regional trade
Regional Markets Pose Unique Challenges
14
• Difficulty in aligning national and regional investment
decisions
• Differences in regulatory environments between
countries
• Limited financing to expand infrastructure necessary to
support regional trade
• Changes in political framework
• Concerns about national sovereignty and energy
independence
Section 4
Suggested Next Steps for Central Asia REM
Regional Power Trade
Regional Power Trade – Proposed Next Steps
Near-Term� Develop inter-governmental and stakeholder agreements
� Define the type of transactions or market to be developed and adopt pan-regional technical and
commercial documents
� Identify the role of central trading and dispatch institutions, improve regional control systems,
communications, and acquire appropriate software
Medium-Term� Improve system supervision and control software
� Improve commercial metering
� Adopt a system for coordinated system planning, especially for high voltage grid
Longer-Term� Implement necessary technological changes and improvements
� Move forward with regional grid development and power system projects
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Central and South Asia Electricity and
Trade Project (CASA 1000)
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Central Asia South Asia Electricity Transmission and Trade Project - CASA
1000
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� CASA-1000 is transformational multi regional Project for
electricity supply (1300 MW) from Central Asia to South
Asia
� Strong partnership (> $ 1000 m financing) including
IsDB, US Gov, DFID, EIB, EBRD, and WBG
� Project ensures long term operational sustainability
� Current Status:1. Work to achieve effectiveness conditions is well
advanced.
2. Bidding for critical AC/DC converter stations and HVDC
transmission line is progressing well.
3. Major procurement packages in advanced stages with
most contract awards likely completed by end of 2017
THANK YOU!
The CASAREM VISION
The Central Asia South Asia Regional Electricity Market (CASAREM) will help develop a modern, sustainable
electricity market between the two neighboring regions.
Central Asian countries, endowed with large energy resources, can help South Asian Countries meet their rapidly increasing demand for electricity – a key growth
constraint
The Central Asian countries could diversify markets for their energy exports and create a source of revenue for
their own economic development.
CASA-1000 is a First Phase of CASARM
•Project Components
A. Transmission Infrastructure� A1 – HVDC Line (~750km/500kV/1,300MW) in Tajikistan,
Afghanistan and Pakistan.
� A2 – 2 HVDC Converter Stations at Sangtuda (1,300MW)
and Nowshera (1,300MW) -- (Supply to Afghanistan
through existing 220 KV line with Tajikistan)
� A3 – HVAC Line between Kyrgyz Republic and Tajikistan
(~475km/500kV).
� A4 – Tajikistan grid reinforcement. (~115 km/500 kV) AC
line from Regar to Sangtuda and other network upgrade.
B. Technical Assistance and Implementation Support� B1 – HVDC and HVAC Owner’s Engineers
� B2 – Environment and Social Management Support
� B3 –Audits, Financial and Revenue Management
� B4 – Project Management Support
� B5 – Coordination
� B6 – Project Communications
� B7 – Capacity Building
C. Community Support Programs (CSP)
Country Ownership: Dedicated Institutions to ensure implementation
sustainability
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• Building ownership through the dedicated regional
institution
• Inter-Governmental Council (IGC) and Joint
Working Group (JWG)
• IGC Secretariat for coordination
• IGC approved the Commercial Framework for the
project with the Master Agreement and Power
Purchase Agreements have been signed.
• Major procurement packages in advanced stages
with most contract awards likely completed by end
of 2017
• Increasing regional market interest in accessing
CASA for expanding regional electricity trade